Analyst: NBC-Time Warner 'isn't idle talk'

DavidB. Wilkerson

It's not every day that companies go out of their way to make formal denials, as representatives of Time Warner
TWX, -0.28%
and General Electric's
GE, -0.72%
NBC unit are doing in response to Rupert Murdoch's claim that Time Warner has offered $25 billion to buy NBC.

Murdoch, the chairman and chief executive of News Corp.
NWS, -1.47%
appeared on his company's Fox News Channel Tuesday and told interviewer Neil Cavuto: "I understand the business (the NBC division) has been offered to Time Warner for $25 billion and one or two well-known people on the board are very much in favor of buying it and the rest are very much opposed to it. That's something that's going on at the moment."

Though NBC indicated last year that it will probably pursue some kind of alliance, GE has never said it would be willing to sell the network outright. But Hyman said he thinks it can happen.

"One could make the case that media assets are not core holdings," Hyman said. "And given the right price, I would say (NBC) is sold.

"It's a very make-sense type of an acquisition, if it ever occurred. Time Warner would be achieving a lot of goals here by buying NBC, because with NBC comes MSNBC and CNBC, most likely."

Time Warner would have to be helped by some regulatory changes, Hyman admitted, given its existing cable networks, such as TBS Superstation, TNT, CNN, The Cartoon Network and HBO. But he said the entertainment giant wouldn't break a sweat worrying about what would happen to the WB network, one of the industry's smaller over-the-air webs. Current federal regulations prohibit the ownership of two broadcast networks.

"The WB network is not really a major distribution point (for Time Warner)," Hyman said. "It fills a specialized niche, unlike NBC. I would never even put the two in the same sentence."

The WB has been one of the few networks to boast an increase in audience share in each of the past three seasons, capitalizing on the teen and young-adult markets with such shows as "Buffy the Vampire Slayer," "Dawson's Creek," "Felicity," "Seventh Heaven" and "Charmed."

But Richard Read, an analyst at Credit Lyonnais, said Time Warner might be reluctant to part with the WB. "I think you'd think twice about killing that," he said.

In other NBC-related news, the network said Wednesday it's agreed to collaborate with the Internet firm Egreetings.com on a series of digital postcards and animations based on NBC shows. Among the first batch of e-cards under the deal will be a set based on "The Tonight Show," "Providence" and "The 70s."

NBC is making an investment in Egreetings that includes equity and on-air promotion. Exact terms weren't disclosed. "With over 8 million registered members, Egreetings.com will provide a powerful assist to NBC in expanding its viral marketing to promote its popular shows and build viewer loyalty," said Egreetings Chief Executive Gordon Tucker in a statement.

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